Question

Mr Ellis invests £800 into an account that’s pays 3.4% compound interest a year. How much will be in the account after 2 years?

Answer 1

Answer:

855.3248

Step-by-step explanation:

Year 1 : 800 + 27.2 (3.4% of 800) = 827. 2

Yeaf 2 : 827.2 + 28.1284 (3.4% of 827.2) = 855.3248

Answer 2

Answer:

855.3248

Step-by-step explanation:

due to it being 3.4% compound, you do 800x1.034^(amount of years)
So you would do, 800x1.034^2 = 855.3248

Or another explanation,

1st year:
3.4% of 800 = 27.2
800 + 27.2 = 827.2
-
2nd year:
3.4% of 827.2 = 28.1248
827.2 + 28.1248 = 855.3248